Page 14 - DMGT509_RURAL MARKETING

Unit 1: Rural Marketing – An Introduction

handsome results. Apart from the tie- up with Iffco, the company has set up Airtel Services Notes
Centres in rural areas to provide services and handle customer queries and complaints,
eliminating the need of call centres. The company has also tied up with Nokia to launch an
educational initiative in order to give rural users a live experience on mobility services,
that include hands on training on making the first phone call and sending SMS with
localised content.
But still selling phones in the rural areas is not a easy job. It is not easy to convince and sell
products and services. Idea Cellular Managing Director Sanjeeva Aga agreed. “Providing
telecom services in rural India is not an easy affair. Companies have to overcome many
constraints, like electricity (causing infrastructural issues) and topographical and logistic
(distribution) issues, among others. Moreover, rural India’s income is dependent on harvest,
monsoon and many other factors. The companies have hardly any option, as metros and
major cities are saturated. The immediate benefits are low and would initially drain the
operators’ overall revenues, rural markets are lucrative in the long run. Look at the FMCG
industry, where most of the majors are now focusing on rural areas.

Question
Analyse the caselet and discuss the case facts.

1.6.1 Marketing Relativity through Competition

Companies do not operate in vacuum; they have to face and deal with the competitive forces
operating in the market. It is, therefore, of paramount importance for companies to know the
exact competitive situation, their moves, their strengths and weaknesses, pricing and promotion
strategies, channels they use for distribution and their reaction time to the company’s strategic
moves like price modifications, introduction of new channels of distribution and advertising
thrusts.
Companies face competition from different sources as given below:
1. Firms selling similar products in same volumes to same customers for giving satisfaction
of a similar nature.
2. Firms likely to offer alternate solutions for similar problems (the airlines meeting the
fare structure of railways is a case in point).

3. Firms getting their R&D operations to bring out innovative uses of existing products or
developing new better products giving superior satisfaction to the buyers.
Companies must plan to have a covert intelligence network that is legal and yet provides them
with competitive information. Once collected the information must be sifted and the unnecessary
data should be deleted while the good data disseminated to those concerned. Companies should
get the customer’s perspective regarding competitive product’s value to the customers, how
they perceive its benefits as compared to the benefits offered by the company’s products.

Companies with the largest market share are the market leaders, belonging to the Star quadrant
in the BCG Matrix. To stay on the top, companies have to keep enlarging their market base,
retain their existing customers and get some non-users to become users as well as take customers
from competition. This involves price reductions; besides better market management including
training of selling team and promotion plans with increased advertising efforts. These activities
take a sizable amount of finances reducing the profits earned by the company.
Companies that have lesser share of the market attempt to increase the same with bigger thrust
on marketing efforts. They try product innovations and differentiations, price penetrations,
lower costs of manufacturing through higher scales of manufacture and experience curve along

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